Get Ready For Mega-Upfront

For the first time ever in television's upfront ad-buying process, the broadcast, cable, syndication and kids segments of the business are likely to all move at the same time beginning later this month. The unusual confluence of markets would potentially be of great benefit to advertisers in putting together package buys in several segments, and less desirable for sellers.

The everything-at-once upfront scenario has developed primarily because of this year's soft economy, which has caused delays in advertisers submitting their budgets for the TV season that begins in the fall. But several buyers said that an annual mega-upfront, despite the confusion and added paperwork it would generate, might actually be a better way of doing business in the future than the traditional, staggered TV marketplace.

"It's good because it would allow us to see all of our media options laid out on the table at once, so we can comparison-shop," said one major media buyer. "We could see what's going on in each marketplace at the same time. When you do [the TV upfront] in stages, it is hard sometimes to anticipate what's ahead."

Donna Salvatore, CEO of MediaVest, which handles TV buying for clients such as Kraft and Burger King, said: "There's no reason I can think of for kids to be bought separately any longer. There is nothing idiosyncratic about kids for us to buy it separately."

Other buyers agreed, noting that with sellers such as Viacom, Walt Disney Co. and AOL Time Warner owning a wide array of broadcast and cable properties, it would make sense to do deals for adult and children's broadcast and cable inventory at the same time each spring.

"It would not be the worst idea in the world, especially today, when everybody is interested in share-of-business," said Gary Carr, most recently a buyer for Initiative Media North America. "You could use [a consolidated upfront] to leverage the little money there is to spend in kids to help negotiate for something else."

While most buyers believe it would benefit advertisers to buy all four segments of the TV upfront concurrently, networks are in no rush to make this year's likely scenario standard operating procedure. A centralized upfront would likely generate long hours of additional back-office overtime in order to sort out and process all the packaged buys made by advertisers.

"It will be difficult to push all the deals into one giant snowball and get all the client approvals in that short period of time, and still have everything ready to go on time [to start the TV season in late August]," said a sales executive for one of the broadcast networks.

But one cable executive said a combined marketplace would be doable. "From our perspective, we would not mind if the adult [broadcast and cable], kids and syndication marketplace took place all at once," said Joe Uva, president of sales and marketing for the Turner Entertainment Group.

Buyers concede that if the market was more robust and there was a danger that advertisers could be shut out of certain programming during key selling periods of the season, like before Christmas, it would be better to keep making their buys in kids, syndication and cable in stages before the broadcast network upfront.

Looking ahead to the buying season set to kick off later this month, buyers contend that overall spending will be down between 5 and 10 percent (see chart). "No network will get equal dollars to last year, unless they offer decreased CPMs -- not in broadcast, cable or syndication," said one major buyer. "In kids, the broadcast networks have less inventory available, so they may be able to get a few percentage-point increases in CPMs. But the cable networks have so much kids inventory, that it will be hard to increase CPMs too high."

Even Nickelodeon, which has enjoyed the strongest ratings increases of the season among kids networks, has so much inventory to sell, at higher prices because of those ratings increases, that it will "be tough for them to sell out," the buyer predicted.

"I have not gotten one client's budget that is up," another buyer said. "Not even the pharmaceuticals, and that's pretty scary."

A major kids buyer said he may begin doing some business the week of May 14, when the broadcast networks will introduce their fall prime-time schedules to buyers. But most of kids, along with syndication, cable and all broadcast upfront buying, could be put off until after Memorial Day, several buyers said.

"The syndicators say they are locked and loaded, but the reality is that they have had no [official requests from advertisers]," claimed one major syndie buyer. In addition to the economy, soft ratings have clouded syndication's prospects in this year's upfront. Last week for example, 52 out of 60 syndicated shows posted ratings declines over the same week last year.

As far as the broadcast upfront, one buyer offered this timetable: "I'm planning to view the pilots the week of May 21 and to review my estimates from the networks. Then the day after Memorial Day, I'll start a leisurely process of buying."

"If the networks want to do deals with negative CPMs over last year, I will do business sooner," said another buyer. "If not, I'll let negotiations linger into July or August."

But one network exec countered that buyers will never hold out that long. "They don't trust one another," the network exec said. "Once one agency places some money down, the others will not be able to resist getting in."

For the first time ever in television's upfront ad-buying process, the broadcast, cable, syndication and kids segments of the business are likely to all move at the same time beginning later this month. The unusual confluence of markets would potentially be of great benefit to advertisers in putting together package buys in several segments, and less desirable for sellers.

The everything-at-once upfront scenario has developed primarily because of this year's soft economy, which has caused delays in advertisers submitting their budgets for the TV season that begins in the fall. But several buyers said that an annual mega-upfront, despite the confusion and added paperwork it would generate, might actually be a better way of doing business in the future than the traditional, staggered TV marketplace.

"It's good because it would allow us to see all of our media options laid out on the table at once, so we can comparison-shop," said one major media buyer. "We could see what's going on in each marketplace at the same time. When you do [the TV upfront] in stages, it is hard sometimes to anticipate what's ahead."

Donna Salvatore, CEO of MediaVest, which handles TV buying for clients such as Kraft and Burger King, said: "There's no reason I can think of for kids to be bought separately any longer. There is nothing idiosyncratic about kids for us to buy it separately."

Other buyers agreed, noting that with sellers such as Viacom, Walt Disney Co. and AOL Time Warner owning a wide array of broadcast and cable properties, it would make sense to do deals for adult and children's broadcast and cable inventory at the same time each spring.

"It would not be the worst idea in the world, especially today, when everybody is interested in share-of-business," said Gary Carr, most recently a buyer for Initiative Media North America. "You could use [a consolidated upfront] to leverage the little money there is to spend in kids to help negotiate for something else."

While most buyers believe it would benefit advertisers to buy all four segments of the TV upfront concurrently, networks are in no rush to make this year's likely scenario standard operating procedure. A centralized upfront would likely generate long hours of additional back-office overtime in order to sort out and process all the packaged buys made by advertisers.

"It will be difficult to push all the deals into one giant snowball and get all the client approvals in that short period of time, and still have everything ready to go on time [to start the TV season in late August]," said a sales executive for one of the broadcast networks.

But one cable executive said a combined marketplace would be doable. "From our perspective, we would not mind if the adult [broadcast and cable], kids and syndication marketplace took place all at once," said Joe Uva, president of sales and marketing for the Turner Entertainment Group.

Buyers concede that if the market was more robust and there was a danger that advertisers could be shut out of certain programming during key selling periods of the season, like before Christmas, it would be better to keep making their buys in kids, syndication and cable in stages before the broadcast network upfront.

Looking ahead to the buying season set to kick off later this month, buyers contend that overall spending will be down between 5 and 10 percent (see chart). "No network will get equal dollars to last year, unless they offer decreased CPMs -- not in broadcast, cable or syndication," said one major buyer. "In kids, the broadcast networks have less inventory available, so they may be able to get a few percentage-point increases in CPMs. But the cable networks have so much kids inventory, that it will be hard to increase CPMs too high."

Even Nickelodeon, which has enjoyed the strongest ratings increases of the season among kids networks, has so much inventory to sell, at higher prices because of those ratings increases, that it will "be tough for them to sell out," the buyer predicted.

"I have not gotten one client's budget that is up," another buyer said. "Not even the pharmaceuticals, and that's pretty scary."

A major kids buyer said he may begin doing some business the week of May 14, when the broadcast networks will introduce their fall prime-time schedules to buyers. But most of kids, along with syndication, cable and all broadcast upfront buying, could be put off until after Memorial Day, several buyers said.

"The syndicators say they are locked and loaded, but the reality is that they have had no [official requests from advertisers]," claimed one major syndie buyer. In addition to the economy, soft ratings have clouded syndication's prospects in this year's upfront. Last week for example, 52 out of 60 syndicated shows posted ratings declines over the same week last year.

As far as the broadcast upfront, one buyer offered this timetable: "I'm planning to view the pilots the week of May 21 and to review my estimates from the networks. Then the day after Memorial Day, I'll start a leisurely process of buying."

"If the networks want to do deals with negative CPMs over last year, I will do business sooner," said another buyer. "If not, I'll let negotiations linger into July or August."

But one network exec countered that buyers will never hold out that long. "They don't trust one another," the network exec said. "Once one agency places some money down, the others will not be able to resist getting in."